Businesses offer incentives to customers in order to increase their sales and to build a sense of loyalty towards the brand. Customers want to feel appreciated and want to make the purchase with the highest value, so they tend to lean towards businesses that offer some sort of stimulus. Promotions and discounts are constantly offered by various brands because they are key to keeping customers happy and incentivised to repeat their custom.
There are many types of incentives, and there is no established formula of which ones work best. It is more a question of what the best fit within your company’s philosophy is. You could focus more on a price reduction sort of deal, such as a certain percentage off or ‘buy one, get one half price’. Or you could look into creating a more complex loyalty programme, with special prices and bonuses for your existing customers.
Businesses from all sorts of fields use incentives, with one good example being the gambling industry; which has always offered deals as a means of expanding its customer base. However, it’s not just about bonuses for existing customers, it’s also about free spins offered to attract new players. They are a great way to encourage prospective customers to engage in the product, as it is of little or no cost to them.
Offering incentives is particularly important for SMEs or new businesses, but equally important for major brands. Even big names, such as Primark or Ryanair, still offer loyalty programmes. Primark not only motivates its customers through rewards and digital gifts (eVouchers, eGift cards, and eCodes), but it also ensures its staff stays loyal to the brand with bonuses and discounts.
Furthermore, Ryanair, another well-established Irish brand, launched in 2014 its ‘Always Getting Better’ programme, which had as a target the improvement of its services. To attract new customers, it created an exclusive partnership with the Erasmus Student Network that offered discounts to students across Europe. On top of that, the company also offers those who book a hotel stay through their website money off their next Ryanair flight.
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A customer incentive programme should help a business achieve a certain goal, be it increasing sales, generating new customers, or building customer loyalty. After deciding on the goal, the business should look into establishing a budget and then choosing the right rewards for its customers. Then, once the marketing and launching of the programme are complete, it is a matter of keeping an eye on the reports and feedback from the customers.
Apart from promoting customer loyalty and increasing sales, incentives also help in other areas. For example, they are an easier way to collect customer data. This is important in marketing campaigns in terms of offering what the customer wants or needs, as well as getting an insight into targeted customer behaviour. Offers and incentives can also be the motivation behind a customer’s decision to share the products on social media or leave a review that could lead to potential new customers.
It is known that attracting new customers costs up to five times more than retaining the existing ones, which is why spending time and money on loyal customers is key to maximising investment. A well-designed and well-executed programme could yield tremendous results for your business. So if you haven’t thought about it before, it is time to start looking into it.